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October 15, 1998

QUANTUM SEES RISE IN DISK DRIVE SHIPMENTS THROUGH Q3

By CBR Staff Writer

Quantum Corp, the giant disk and tape drive manufacturer from Milpitas, California has reported its first sequential growth in hard disk drive revenues for over a year. Following a protracted recession across this sector of the storage industry, Quantum said it had shipped 5.8 million desktop drives in the third quarter, up 10% from the June quarter. And despite continuing capacity induced pricing pressures, revenues from this division were also up by 5%. Overall, Quantum’s second quarter net profits were down 83% on last year at $17.3m while total revenues also fell by 25% to $1.16bn. More significantly though, total revenues were up by 5.5% on the dismal first quarter in which Quantum laid off 2% of its staff and rearranged its business units in an attempt to cut $60m a year from expenses. However, Michael Brown, Quantum’s chief executive was quick to point out that the company is still losing money on its hard disk drive activities. The news of increased shipments follows Wednesday’s announcement from rival disk drive maker Seagate Technology Inc that it too had increased revenues sequentially in its third quarter. Recent results from PC chip makers Intel Corp and Advanced Micro Devices Inc also point to a strong surge in demand for all things PC related, and the dense cloud which has been hanging over the disk drive sector may slowly be lifting. Meanwhile, Quantum said its highly profitable DLTtape business increased revenues by 14% sequentially, offsetting losses from the disk drive business. Brown said the overall sequential improvement in results demonstrated the advantages of Quantum’s diversified business model.

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